GameStop Closing up to 200 Stores This Month as Board Approves $35B Performance-Based Pay Package for CEO

Why It Matters

The aggressive store closures and massive equity incentive signal GameStop’s bet on a digital‑first turnaround, while the $35 billion package raises governance and shareholder‑value questions in a struggling retailer.

Key Takeaways

• GameStop to close up to 200 stores in Jan 2026
• Total U.S. closures reach 790 stores since FY2024
• CEO Ryan Cohen offered $35 billion performance‑based option package
• Package requires $100 billion market cap and $10 billion EBITDA
• No salary, cash bonus, or guaranteed stock for Cohen

Pulse Analysis

GameStop’s decision to close up to 200 stores in January marks the latest phase of a rapid contraction that has already seen 590 U.S. locations shuttered in FY2024. The closures reflect a broader industry shift as brick‑and‑mortar video‑game retailers grapple with declining foot traffic, rising digital distribution, and a post‑pandemic consumer base that prefers streaming and online purchases. By trimming its physical footprint, GameStop aims to lower overhead, reallocate capital to its e‑commerce platform, and streamline inventory management, a strategy echoed by other legacy retailers attempting to stay relevant in a digital‑first market.

The $35 billion performance‑based compensation package for Chairman‑CEO Ryan Cohen is equally headline‑grabbing. Structured solely around stock options, the award only vests if GameStop’s market capitalization climbs from roughly $9.3 billion to $100 billion and cumulative EBITDA reaches $10 billion. Unlike traditional executive pay, there is no base salary, cash bonus, or time‑vested equity, tying Cohen’s personal wealth directly to aggressive growth targets. Critics argue the scale of the incentive could misalign management priorities, while supporters contend it provides the bold leadership needed to execute a digital transformation.

Both the store‑closure plan and the lofty compensation scheme send a clear signal to investors and competitors: GameStop is betting on a high‑risk, high‑reward turnaround. If successful, the retailer could re‑emerge as a hybrid platform that leverages its brand and community while capitalizing on online sales and subscription services. Failure, however, would deepen shareholder losses and could prompt activist interventions. The moves also underscore a wider trend in the gaming sector, where legacy retailers must reinvent their business models or risk obsolescence in an era dominated by cloud gaming and direct‑to‑consumer digital storefronts.